Comments by "Curious Crow" (@CuriousCrow-mp4cx) on "Garys Economics"
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Sorry, but you're wrong. Who got all the millions of QE before during and after during Covid? It wasn't migrants. It was corporations and plutocrats, your employers. And they didn't put up your wages. But the prices of houses went up as people with cash from their investments bought houses and competing with each other pushed the prices up and up and up, and priced you out of the market. Why can't you get well paying jobs is that companies make more money by speculating on the stock market by manipulating their stock prices, rather than investing. Why do you thing the stock market is going up and up while your wages aren't? They don't need more people except in the jobs you are unlikely to do. And Technology as well. Just look at the job market. And the economy? What's the biggest sector in the UK economy? Financial Services, which is so profitable that they can invest in algorithmic investment programmes, and other computing that removes jobs. They only need people to program those. They don't need backroom clerks, they don't need counter clerks, they don't need branches. They don't need big HQs in Canary Wharf, because the computer can do it all. They don't need as many workers any more to make their money. And it's the same in almost all service industries. Clerical workers are a dying breed and the starting wage is beginning to be minimum wage. Most of the work is computerised, and 1 person can do the work 9f 3 people. Where are those jobs? Falling off a cliff, or being paid lower. Migrants didn't pay that. And the joke is a loof the profits being made don't stay here, because a lot of foreign investment send those profits back home. Blue collar manufacturing jobs are another dying breed. Not only is manufacturing a tiny part of the economy - only 15%, and those jobs are disappearing. And guess what? Brexit accelerated that decline because instead of pitching at the high margin low hanging fruit in Europe, we're trying to compete with economies that are able to undercut us in labour costs. That, and their countries have plenty of cheaper workers because they had more children. And they got those because we wanted cheaper goods. Migrants think their going to come here and get rich. Nope. They're suffering as much, and sometimes, even worse than you. as you. They have 2 or 3 jobs. Even the Uber drivers are using 2 and 3 apps at the same time to get fares. The UK economy for workers is shrinking. Not for investors and the asset wealthy. Migrants aren't to blame. And if and when you get rid of them, watch how worse things will get. Technology is coming for your job, and employers very rarely train people anymore. Only certain sectors still offer apprenticeships, and you can't live on that money independently, because legally they can pay apprentices below minimum wage. Even today, a training firm is offering apprenticeships for classroom assistants, who normally get paid minimum wage any way. And the pressures are so bad in schools not only are they having difficulty attracting and retaining classroom assistants they're having the same trouble with teachers in the state sector. They're leaving to work at Aldi. So, honestly, it's a lie that migrants are coming here for your jobs. The only sectors expected to grow in the UK is computing and social care. The first is academic, and the second is providing personal care to elderly people. Not working class jobs. And not white collar jobs either. So, it's bad for miggrants. It's bad for you in the same way. For the Sam e reason. So by all means blame migrants, and when they're gone, who are you going to blame then? The poor, the sick, and the elderly? And when they're gone, who then?. Gary's 100% right.
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That's what Gary described as State Capture, and like gunk in the drains blocking the flow of water, it's a perennial problem because extendive asset wealth gives you power and influence. But it doesn't have to be that way. If we don't put the effort to ensure our politicians serve the interests of every citizen, then that's on us. Our ancestors came back after World War II, and used the ballot box to draw a line in the sand. And unfortunately, we can't say "one and done". It's only taken 50 years or so to erode that legacy, of the electorate really taking back control. We didn't realise that that legacy had to be defended. A legacy that fought ignorance and despair, cannot defend itself against a system that relies on leveraging some of the worst traits in human nature. We must protect ourselves against those traits getting out of control in those we reward for exploiting them. Democracy is the only means the people have to tame it, because to govern the country requires our approval to have legitimacy. The cynical say if voting meant anything, they wouldn't let us do it. But I say, if voting meant nothing, why do the plutocrats spend so much time, effort, and money on trying to influence who and what we vote for? Why did certain people try to make it more difficult for certain citizens to vote. For once, Rees-Mogg wasn't lying when he admitted that Voter ID was gerrymandeting. That's why our voting system needs to upgraded and made more effective democratically. We have to move to a system where every vote counts. It's only one defence against those who would manipulate us, but it's an essential one for our democracy to act more effectively. We have to have systems of governing that ensure that our best interests of our communities and country are served. We have to stop being dependent on being lucky. Our democracy needs strengthening, and so do our communities. Neoliberalism isnt just an economic experiment gone badly wrong. It was a social and political one gone awry too. The ideology wanted us to believe that there was no such thing as Society, until those pushing that nonsense wanted it to replace the state's collective support that had been deliberatively withdrawn to provide bug tax cuts to cipirations and their owners, who had 8nturn suppressed wage growth fir decades. They encouraged us to believe that John Donne was wrong when he asserted that No An is an Island, written when the powerful wealthy elite wreaked havoc on their people to entrenched their power. Donne wrote that passage as a survivor of political and economic upheaval in England in the late 16th century that was dressed up as a religious and political struggle, but was the wealthy throwing the little people under the bus yet again, to secure their power. Like a gardener having to keep on weeding the garden, the citizens if this nation have to keep fighting time and time again, against those who would put themselves above the interests of the country and their people. And as austerity and the pandemic showed us, the tendency for the asset wealthy and entitled to throw poor people under the bus never goes away. So we must be able to weed them out. And we must work at it to protect the harvest of our sweat, of our hard work being stolen and hoarded while we suffer. That's the part 9f our history not exactly taught and it should be, because the work can never stop, can it? It's not the 16th century. it's not the 20th century. It's the 21st century. And the work has to continue for the next generation not to slip into poverty again.
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You must be pretty bored today. You've obviously never had an original thought of your own. Or 1) you would have worked out that Gary was and still is a capitalist. 2) Capitalism is like Ice Cream - it just doesn't come in vanilla flavour. Other countries are less wealthy than the US, but the quality of life for those who work hard, save, and pay their taxes is much better than the US. They have better outcomes like longer life expectancy, less homelessness, less suicide, and less mental health issues than the US, and they're capitalist too. Perhaps it's beyond your Ken, but in many ways you are aren't doing so hot. As Scott Galloway said, America's place to make your money, but Europe is a place to live and spend it. You need to get out more, and see the world as it really is, and learn what it's really like. You'll learn that the American way isn't the only way to do capitalism. There is no perfect way to do capitalism except one - ensure people have what they need, more than what they want. If they want more they can go for it, but not at everyonelses expense. And not at the Planet's expense either. It's the only home we have.
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Not really right now, because your loan is literally a drop in the ocean in the current global debt based economy. Gary is simplifying a massive, mostly hidden financial mechanism, which is the creation of credit by banks and non-bank financial institutions. The scale is such that it is bigger than any national economy, and it's not controlled by any government. It's controlled by the banks and non-bank financial institutions, and therefore controlled by those who own these, who in turn use their wealth to directly and indirectly influence national governments, and to buy assets everywhere. Assets are true wealth, and debt is the major asset class in every economy. Why?
Debt is the major mechanism of creating money. Approximately, over 90% of all money created is credit from loans made by banks and non-bank financial institutions. This money creation goes on in every financial centre 24 hours a day, 365 days a week. And a lot of it is done in offshore financial centres that are not regulated by governments. The bit of the financial system that is regulated by government is the tip of the iceberg. Your loan comes from that tip, but the money created to provide you with your loan originated much further down below, and is very difficult to trace where it came. Your loan is the end of a chain of loans as Financial institutions borrow and lend to each other. Big systemically important investment banks/NBFIs to commercial ones to retail ones, etc. And billions are moved around, all out of sight of the public. They also lend to governments and multinational corporations too. That where most of our money comes into existence. And most of the largest owners use offshore banks and shell corporations and blind trusts in tax havens to hide their ownership. Yes, you can track shareholdings in the visible tip of the iceberg. Those are the financial institutions that interface with the public, but not the rest. As tax havens exist to hide ownership of assets held in them. (And a major driver of Brexit was the threat posed by the EU's Anti-tax evasion Directive to Britain's major share of the global tax haven business. (Watch Britain’s Second Empire here on YouTube for a still relevant explanation.)
What Gary is proposing is to tax the visible bit of wealth. That is big enough already to make that affordable for the wealthy to pay that. It won't touch the rest, but at least living standards can be maintained for those who rely on a job for a living.
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Divide and Rule is the oldest political trick in the book. At home and abroad, it's been a tool of powerful minorities to maintain control over the people. Turning them against each other, means people dissipate their strength and their attention in fighting each other. And either blindly believe they will win, (they can't - they're not asset rich and never will be) , or fail to notice how the asset rich minority are hoovering up the asset wealth, while they and the people they're fighting have to do with less and less over time. Pastor Niemöller's poem describes the end result. Why? Because when one 'enemy' isn't enough to distract, they will find another one. That's the reason behind the Culture Wars, and the Hostile Environment around immigration. And it's all convenient lies to distract voters from the real reason why you will get poorer, have to make do with less, and your descendants will be even worse off.
Don't let them distract you. Follow the money. If you don't, eventually the Hostile Environment will be the norm for you, whilst the asset wealthy will just keep on hoarding their wealth.
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Nope. To reverse the Cantillion Effect caused by QE, one cannot let just the purchasing power of the money pumped into the economy and accumulated overwhelmingly by the asset wealthy be eroded by inflation. But that is exactly what the BOE and the Treasury, and other central banks are doing. In particular, the BOE are only reducing what is held on their balance sheet. In effect, that's an accounting exercise, leaving the £800 million of assets in the pockets of the Asset Wealthy, which they are spending on buying more assets, and crowding out the ALICEs of those markets - the (A)sset-(L)imited, the (I)ncome-(C)onstrained, and the (E)mployed. What's worse, the BoE is not allowing the Bonds they purchased from the Dealer Banks to keep them afloat during Covid to mature. They are selling them back to the dealers at a discount. So the post-Covid K-shaped income recovery is being entrenched, with the incomes of the ALICEs being depleted as their purchasing power is also being eroded, whilst the passive incomes of the Asset wealthy continue to appreciate in quantity and value. The only way to reverse this increasing spread between the two groups is tax the asset wealthy. This will reduce the money supply in real terms, and not just in nominal accounting-exercise terms. And those who got most of the stimulus will bear the cost. Not the ALICEs who got very little.
In fact, all QE has proven is that the 1) financial capitalism of today is replicating the mistakes of the past in entrenching rentierism and unproductive investment. 2) people hear what they want to hear, and don't always know what they are being told isn't true, and 3) not disincentivising rentierism is a political choice that will impoverish ordinary people, and destroy real economic growth by reducing the resilence of the economy as a whole, whilst politically and economically disenfranchising the ALICE majority. Too much rentierism creates economic instability and prohibits wealth creation amongst those who need it the most.
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Read the New Yorker magazine article "What has 14 years of Conservative Rule done to Britain? It's 10,000 words of truth bombs, including a section on local authority funding from Central Government, which has fallen by 45 percent since the Conservatives came into power, even though the national debt rose from 56%, to over 100%, and now is at 97% of GDP. Councils are going bankrupt in the United Kingdom, as their local populations get poorer. So, even to fund what little there is left to their functions, they have had to put in above inflation increases in council tax and business rates, even while their populations get poorer and/or leave to find better work. So reversing clean air policies won't cut it, cutting business rates, won't cut it, and all your other solutions are now untenable. And the process began that bought back the slums to Britain started 40 years ago. We have to become serious about the problem, because it might already be too late.
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PS Gary, might be worthwhile reaching out to Richard J Murphy for a chat, as he wrote the Joy of Tax and as you want to bring Distribution to the centre of economic thinking, it might be useful to have a chat with him, as he's just finished a big report on reforming the Tax System as you can see on his blog called "Funding The Future". He's also a daily uploader of short but focussed content on politics, economics, and accounting. I call him "Bomber" Murphy, because like you, he keeps on dropping truth bombs are very well targetted. And we need to find the joy in tax, because it's a tool that we need to understand far better and fear less. and talk about how if used correctly, tax can help counter and prevent economic externalities like misallocation, and promote fairness and wealth equality. Arguing against tax is like arguing against having taps, once you understand how they work.
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Gary, I think this was a great video. You explained the problem, really, really well. I hope Starmer and Reeves realise that they have to be more assertive about it. The exposure that the UK has to Interest Rate Risk is real, because the economy is structured in a way that makes it more unlikely for growth to occur. And Brexit has closed off much of the opportunities to grow the economy in productive ways. And squeezing even further the bottom 50% by austerity, will be vampirising all future potential for growth, which depends on consumer spending. An economy, where the state tries to borrow back the excess money created during the pandemic it gave out is a futile exercise. It's not gonna happen. This pressure is a reality check for the Labour economists, who deluding themselves. They have to tax the asset , as the bottom of the income and wealth distribution are running on fumes already. Why? Well, in modern revolutionary history, revolutions only happen when the middle classes are hit. And if an opinion piece in the FT is correct in its conclusion that the bottom of tge income-wealth distribution in the UK is getting closer to the middle, then things are going to get messy. Historically, the economic impact of pandemics don't dissipate quickly, and the push to get back to "normal" whilst understandable, is also the missed opportunity to sort out the economy. As you say, nobody's asking the right questions, about the billions of pounds created that needs to be taken out the money by government. The people who are hurt most by austerity are those who need government spending the most, but didn't end up with that excess cash. The people they spent it with did. And they're the asset wealthy.
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